Yet another reason to get rid of the Renewable Fuel Standard: So much fraud.

posted at 1:01 pm on December 20, 2013 by Erika Johnsen

There are any number of reasons that Congress should finally kill the Renewable Fuel Standard, that plague of what was once farcically branded as an “green” mandate that requires refiners to blend an ever-increasing volume of certain politically-determined biofuels into the fuel supply or else purchase special credits to exempt themselves from having to do so. Among them: It incidentally highjacks food and gasoline prices, sending them ever higher; it incentivizes farmers to bring marginal lands into production and is actually counterproductive to environmentalist goals on net evaluation; and, oh yeah, its very existence in the form of a national mandate means that it is little more than corporate pork for agribusiness that injects artificial signals into the free market and is not a cost-effective or efficient mechanism with which consumers would willingly abide.

Back when Congress first enacted this hot mess of a horrible idea, they blithely assumed that Americans’ gasoline consumption would continue at an indefinitely upward clip, but now that a slowed economy and more fuel-efficient vehicles have more or less flat-lined that demand, that whole “ever-increasing biofuel volumes” part of the RFS equation is blowing up in the industry’s collective face.

Oh, and here comes still one more reason to kill the RFS, via Bloomberg:

The U.S. Environmental Protection Agency said it has invalidated 33.5 million renewable-fuel credits sold by an Indiana company for biofuel it didn’t produce, the fourth time the agency has alleged fraud in the program.

The filing today follows fraud charges filed against the former owners of the Indiana-based E-Biofuels LLC in September. The U.S. Justice Department accused them of falsely claiming its products qualified under government incentives for renewable fuels.

… Before today’s action, the agency had said three companies produced a total of 140 million fraudulent Renewable Identification Numbers, or RINs.

The basic credit for ethanol last sold for 28 cents. At today’s value of about 40 cents each for biodiesel, the RINs affected by EPA’s decision would be worth about $13.4 million.

[Sidebar: Remember that one time, last September, when the Paper of Record pretty much tried to blame Wall Street for -- horror of horrors -- speculating with RINs and "exploiting" the ethanol market? ...Hilarious. Just hilarious.]

Fortunately, bipartisan aversion to the mandate as it stands is catching on, much to Big Ethanol’s dismay. If even the EPA can kinda’-sorta’, not-quite-but-almost admit they were wrong on this one (they elected to decrease next year’s required biofuels volume last month), maybe Congress can get its act together, too.


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its very existence in the form of a national mandate means that it is little more than corporate pork for agribusiness

Which is why it’s here to stay in Amerika.

itsnotaboutme on December 20, 2013 at 1:03 PM

Anybody else notice that the CPI does not include food or fuel? And this mandate completely distorts the cost of food and fuel and only upward. Nice gimmick eh?

They removed the biggest factors regarding true inflation rates.

DanMan on December 20, 2013 at 1:12 PM

Yet another reason to get rid of the Renewable Fuel Standard: So much fraud.

The EPA is fraud by definition.

Happy Nomad on December 20, 2013 at 1:18 PM

Keep posting, Erika.

blink on December 20, 2013 at 1:17 PM

Everyone of us that pays any attention knew immediately the difference the 10% ethanol blend made on mileage and performance in our cars. Perhaps if had a sipper and a short commute it doesn’t matter. Maintain a fleet and it screams at you.

Last year after we finally had crops come in after the drought in 2011 farmers went ape-shart with corn for ethanol. The price was higher than I’ve ever seen.

This stupid ethanol mandate harms every aspect of our economy. Needlessly.

DanMan on December 20, 2013 at 1:25 PM

Among them: It incidentally highjacks food and gasoline prices,
===============================================================

Speaking of Corn:

China
13h
China rejects 545,000 tons of imported US corn that it says contained an unapproved genetically modified strain – @AP
read more on bigstory.ap.org
=============================

https://twitter.com/AP

canopfor on December 20, 2013 at 1:30 PM

Erika, I know these types of posts don’t get the most comments, but I think your work on this subject is incredibly important – even if conservatives are only reading the headlines…

Keep posting, Erika.

blink on December 20, 2013 at 1:17 PM

Agree.

Fallon on December 20, 2013 at 1:33 PM

Yikes!

Bmore on December 20, 2013 at 1:34 PM

China rejects 545,000 tons of imported US corn that it says contained an unapproved genetically modified strain

canopfor on December 20, 2013 at 1:30 PM

What does it say about China that they have to import corn?

Happy Nomad on December 20, 2013 at 1:34 PM

Who is that guy?

Schadenfreude on December 20, 2013 at 1:36 PM

Is that Clapper’s brother?

Schadenfreude on December 20, 2013 at 1:37 PM

What does it say about China that they have to import corn?

Happy Nomad on December 20, 2013 at 1:34 PM

This has nothing to do with the corn as much as China showing how they can hit us without firing a shot.

Rio Linda Refugee on December 20, 2013 at 1:39 PM

What does it say about China that they have to import corn?

Happy Nomad on December 20, 2013 at 1:34 PM

and what kind of cheese do they have in China?

DanMan on December 20, 2013 at 1:40 PM

The U.S. Environmental Protection Agency said it has invalidated 33.5 million renewable-fuel credits sold by an Indiana company for biofuel it didn’t produce, the fourth time the agency has alleged fraud in the program.

…was the CEO a ‘budler’ for JugEars………what’s the problem?

KOOLAID2 on December 20, 2013 at 1:45 PM

‘bundler’

KOOLAID2 on December 20, 2013 at 1:46 PM

The EPA is the most politicized incompetent agency in Washington. Complete fools, charlatans and progressive loons.

pat on December 20, 2013 at 1:46 PM

canopfor on December 20, 2013 at 1:30 PM

What does it say about China that they have to import corn?

Happy Nomad on December 20, 2013 at 1:34 PM

Happy Nomad: Good point, maybes they should invest a little loot, in farming!!:)

canopfor on December 20, 2013 at 1:55 PM

Why does HotAir keep putting up a pic of former
Cardinals manager Whitey Hertzog??

ToddPA on December 20, 2013 at 2:01 PM

But it is fraud by the right kind of people. This fraud is expected and is encouraged by the left (see, e.g., the explicit endorsement of fraud in the case of the Amazon moms program). This is how they achieve they pay back their supporters in our increasingly crony-capitalist, fascist economy.

besser tot als rot on December 20, 2013 at 2:07 PM

Erika, I know these types of posts don’t get the most comments, but I think your work on this subject is incredibly important – even if conservatives are only reading the headlines…

Keep posting, Erika.

blink on December 20, 2013 at 1:17 PM

Agree.

David Blue on December 20, 2013 at 2:07 PM

Ethanol made sense at the time it was introduced to control air pollution in certain cities. It did work. Technology passed it up decades ago. Strictly a scam since then.

CW20 on December 20, 2013 at 2:10 PM

Ethanol made sense at the time it was introduced to control air pollution in certain cities. It did work. Technology passed it up decades ago. Strictly a scam since then.

CW20 on December 20, 2013 at 2:10 PM

You’re thinking of MTBE.

besser tot als rot on December 20, 2013 at 2:16 PM

Have they figured out that there’s no such thing as renewable energy yet?

Oldnuke on December 20, 2013 at 2:53 PM

blink on December 20, 2013 at 2:22 PM

Or, it could be they’re at the store stocking up on cocoa and buying a new set of flannel onesie pjs.

GWB on December 20, 2013 at 3:05 PM

China rejects 545,000 tons of imported US corn that it says contained an unapproved genetically modified strain – @AP
read more on bigstory.ap.org
=============================

https://twitter.com/AP

canopfor on December 20, 2013 at 1:30 PM

What?!?! You mean our corn was made out of food, not plastic!?!?!?

ScottG on December 20, 2013 at 3:11 PM

Erika, I know these types of posts don’t get the most comments, but I think your work on this subject is incredibly important – even if conservatives are only reading the headlines.

I couldn’t agree more. I look to Erika’s posts on the “green” issues a lot when I blog about them myself. It’s very stealth tyranny that’s actually going on, and more people should see it for what it is and pay more attention to it.

Jackalope on December 20, 2013 at 3:33 PM

What?!?! You mean our corn was made out of food, not plastic!?!?!?

and no lead!?!

DanMan on December 20, 2013 at 3:36 PM

This is a sign that conservatives can definitely win this issue by continuing to chip away at the public’s flawed perception about alternative energy – which was induced by the media 5 years ago.

blink on December 20, 2013 at 2:22 PM

We can win on this issue but will we? People wake up in the morning thinking that Big Oil is big and mean and rich and The Environment is natural and clean and a victim of bullying. It will take a lot to change that meme and conservatives can’t message themselves out of a paper bag…case and point is that these excellent posts by Erika are often passed over. The Left has the populace right where they want them on this, I’m afraid.

Jackalope on December 20, 2013 at 3:37 PM

It incidentally highjacks food and gasoline prices,

Do you really mean to say that it illegally seizes food and gasoline prices by force?

Or that it jacks them up?

Believe it or not, there’s a difference.

bgoldman on December 20, 2013 at 3:37 PM

Every time I see Gina McCarthy I am reminded of the Kinks’ hit, “Are You a Boy or Are You Really a Girl?”

bw222 on December 20, 2013 at 3:53 PM

And then there’s this dude:

The EPA’s highest-paid employee and a leading expert on climate change was sentenced to 32 months in federal prison Wednesday for lying to his bosses and saying he was a CIA spy working in Pakistan so he could avoid doing his real job.

John Stewart devoted some time to him. He even applied for and got his own private parking space so that he could more easily get to the building he never shows up at.

MJBrutus on December 20, 2013 at 3:57 PM

Alternative fuels?
Great … can anyone explain how or WHY the NAVY is paying over $50/gal for JP fuels for the fleet’s AIRCRAFT?
This nonesense was started under W but is it beyond STUPID that is persists to this day.
It is fitting that King Putt does his best to completely Phugup the Military. Bleed it to death.
Any comment TAXPAYERS’s ?
Bueler, Bueler?

Missilengr on December 21, 2013 at 12:36 AM

Thanks for concurring Fallon and David Blue.

I think one of the reasons that these posts don’t get many comments is because our registered liberals don’t want to try to argue the facts. Actually, they don’t even want to try trolling a thread because most of them are too clueless about energy, science, math, and economics to even try to offer any type of argument.

This is a sign that conservatives can definitely win this issue by continuing to chip away at the public’s flawed perception about alternative energy – which was induced by the media 5 years ago.

blink on December 20, 2013 at 2:22 PM

…you’re not alone!

KOOLAID2 on December 21, 2013 at 12:43 AM

maybe Congress can get its act together, too.

We have a Congress? Who knew!

odannyboy on December 21, 2013 at 12:15 PM